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2019 (3) TMI 1302 - AT - Income TaxDisallowance of expenses and Penalty u/s 271(1)(c) - labour expenses - labour expenditure related to son & wife - Son is helping the father but wife is house-wife - second round of litigation upto the Tribunal - HELD THAT:- In the first round, the Tribunal has remitted this issue to the file of the ld.CIT(A) for fresh adjudication. The assessee has filed fresh material before the ld.CIT(A) which have been considered by the ld.CIT(A), but concurred with the AO. A perusal of the record would indicate that payments have been made through account payee cheques. Identity of both the persons is not in dispute. The AO was satisfied to some extent that son was helping his father. But on the basis of their statement, he harboured a belief that father of the family members of the assessee might have inflated the expenditure by debiting the same in their names. After considering details, we are of the view that possibility of helping her husband by Usha Chauhan and Shri Harish Chauhan helping his father in his business cannot be ruled out. They may not be well aware about the bills issued in their names, but they have confirmed that they are attending to the business needs and helping the assessee in his proprietorship concerns. AO ought to have appreciated this aspect keeping in mind smallness of the business, which is not in an organized sector. It is not new that family members helping each other in doing business in their proprietor-ship concerns. If some salary is attributable to them on their working, then it should not be doubted simply for the reason that those family members are not aware about the raising of bills in their names. To our mind, the AO is too theoretical instead of appreciating the reality of the business of such family proprietorship concerns. We allow the appeal of the assessee and the delete impugned addition. penalty u/s 271(1)(c)- - HELD THAT:- the quantification of the penalty is depended upon the addition made to the income of the assessee. Since we have already deleted the additions, penalty u/s 271(1)(c) does not survive - Decided in favour of assessee.
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